Podcast: Generative AI and Predictability in the Dispute Resolution Process

May 28, 2024 | with Rich Lee & Ari Kaplan | Reinventing Professionals

Ari Kaplan and Rich Lee discussed the emerging technologies affecting the dispute resolution process, the role that chatbots and generative AI applications serve in ADR, and the skills required of modern neutrals.

Check out other Podcasts featuring Rich Lee: Tech Adoption Strategies for the Risk Adverse Attorneys Podcast

 

Transcript:

welcome to reinventing professionals, a podcast hosted by industry analyst Ari Kaplan, which shares ideas, guidance and perspectives from market leaders shaping the next generation of legal and professional services. This is Ari Kaplan, and I’m speaking today with Rich Lee, CO, founder and CEO for new era. ADR, a technology company increasing predictability in the legal dispute process. Hi rich, how are you doing, Harry, how are you I’m doing great, and I’m looking forward to this conversation. So tell us about your background and the genesis of new era. ADR, I’ve been attorney for 18 years, unconventional legal career. I think the career arc, and the theme across my career has been building practices, building markets, and then building companies. So background was engineering. Went into IP, then went into IP, investment banking, brokering a lot of technology transactions, buy side and sell side. As part of the buy side work was in helping build out the market in Asia for a couple different companies. Then joined a couple different technology startups, one in financial technology, one in data science. Really interesting companies joined both of them early on. So the FinTech company I joined when it was a 13 or 14 person company, we built and scaled that over three and a half years, sold that, and then after that sale, joined a data science company, very interesting, started by the data team from President Obama’s 2012 campaign. And so taking all their learnings and tactics and methodology and, of course, technology that reelected a president, and applying it to every industry. And so I joined when they were about a 30 or 40 person company, built and scaled that company, raised a bunch of capital for the company over six and a half years. Also built out the legal team, cyber security team, privacy compliance, you name it. And then left in December of 2020, to get ready to officially launch new era. And New Era was, this was the idea of my co founders and I. So four of us on the founding team. Three of us are ex GCS. One of one of us is a former head of opera legal operations and compliance. But solving that age old problem of, why does it cost so much to resolve what we like to call the nine like 99% of legal disputes in this country, right? So not your top 1% highly sophisticated, highly complex, trade secret misappropriation cases, patent infringement, some billion dollar case, leave all that in court, but it’s the everything else, where the three of us who were GCS got tired of telling our CEOs to walk away or settle a case, when just before that, we were telling them that we would win it. And it’s addressing that issue of, why is it that for all cases, that’s just the default calculus, that if something gets filed, if or if we want to file something, we just have to automatically assume it’s going to be a 1218, 36, month process, and all the pain, the acrimony and the expense that comes with it. And so for us, the answer was, you can we certainly built a lot of tech to facilitate end to end arbitrations and mediations, and we can get into that. But it was also the realization early on that we have to go further. So we built a new forum. We needed to create a brand new place for people to resolve legal disputes. And at the end of every Terms of Use, at the end of every contract where it says, if we have a dispute under this agreement, we will resolve it in the courts in New York or another arbitration forum, people are now striking that and putting in new era ADRs, literally, we are an alternative forum to anything that exists, but way simpler. And so what we are in a nutshell is 100 day arbitrations and mediations, all for one flat fee, all fully virtually, but with the same quality arbitrators and mediators that you would find any anywhere else that was really important to us, because in that 99% is a lot of meaningful employment disputes, breach of contract claims, consumer claims, you name it. And so we still had to have the same quality arbitrators and mediators that we were finding, but other forums, and fortunately for us, they loved what we’re doing, also joining our bench. And so as a result of the flat fees, the 90% faster and cheaper you’re saving, companies are saving tons of time and money right on legal disputes, there’s cost predictability, but just as companies are also saving time money, so are the plaintiffs, and so are the individuals who are participating, you know, in these disputes. And when they are bringing a dispute, even against an organization, they’re going to have it done right in 100 days. And that’s a huge advantage to consumers and employees, too, who a lot of times, people, oftentimes, especially in certain outlets, talk about just the cases that are frivolous be how many meritorious cases aren’t brought because the individual just doesn’t have the bandwidth, the stamina right to endure a 1218, 36, month process, and so that 100 days.
The efficiency and the cost effectiveness, really, I think, will bring revolutionize disputes and focus them back on just the merits. What is this about? And none of the games. How are emerging technologies affecting the dispute resolution process? A lot of tech coming out, of course, right now the all the rage is Gen AI, but I do think that a lot of new technology is bringing a good deal of accessibility to the dispute resolution process, right, whether it’s in court or whether it’s in a ADR form. But you have technologies now that are able to identify areas where individuals have claims and people have potentially been wronged, right, and help attorneys go help those individuals. You have a lot, of course, with Gen AI, the big thing is the generative part, right? And so the generative part is helping a lot of organizations, and certainly individuals, generate filings, generate documents that otherwise would have been much harder to create, and as a part of creating a better set, more coherent set of documents, for filings, for claims, for anything you’re as a result of that, helping that individual with the claims and asserting their own rights. And so that’s what comes to mind. Those are the two areas where you see a lot of the technology helping, I think, create a lot of a lot more accessibility, certainly on the kind of analytics side and the data side, there’s a lot of litigation intelligence, a lot of folks building very interesting and sophisticated and incredibly useful research tools. We’ve all heard about a lot of the big names in the market. Those, of course, are changing dispute resolution terms of guiding, strategy, guiding go forward, advice to clients. Where I get most excited is a lot of the stuff that helps drive a little more accessibility. What role are and will chat bots or generative aI have in decision making, in the ADR process, chat bots and Gen AI applications in the overall ADR process, just like everything I just described earlier, I think will have an impact in terms of summarization, accessibility, use cases, but the decision making, I think humans still need to be in the middle. And so there’s certainly a world where I think Gen AI will get to a place where it might be able to help resolve certain cases all the way through resolution. But the human element right now is so important, and it’s the element of understanding context in different situations, right the nuances of different situations, the empathy of the ability to actually understand the perspectives of both parties, and for human to be able to put themselves in each party’s shoes, understanding sometimes that the technically correct position may not be the best choice, right, in context of a series of considerations, right? And so I think those are the things that come with experience, come with the human experience. And so having that human in the middle for a lot, for most disputes, I think will still be incredibly critical. But that said, as there’s more and more as Gen AI improves, and certainly as as Gen AI improves, I think in some repetitive situations, guy can certainly be trained right to be as capable as humans, to resolve a very kind of defined set of repetitive disputes. But still, I think somewhere in the future when it comes to decision making, can you share any examples of where you think chat bots or generative AI applications might take place of a human arbitrator or mediator? So it’d be a combination of data and then, of course, the AI, because it has to understand, certainly, potentially, patterns in in a certain type of dispute. And that’s where I was going with the repetitive situations. You’re going to need that training set. And then as you train the AI, then there is a world where it could actually dispense with cases and issue resolutions based on historicals and applying the historicals and the training data and the model right to the current whatever current case there is. How does the new era business model differ from a traditional ADR provider? A
lot of different areas. Certainly our procedures right. Our procedures are designed to get parties to 100 day resolution right, and it’s, of course, advantageous for both sides within the procedures without getting too deep into the weeds. For instance, one hallmark is, is discovery right? And we created a set of procedures and a set of incentives that help the parties. The parties still get discovery. They can still make discovery requests of each other, but taking the perspective more of what is an arbitrator think they need to understand a case and make a decision, instead of allowing taking the current standard, which is generally applied.
Elsewhere, which is, well, what does each party think they need to put on a good case? And the latter, when it’s subjective and up to the perspective of the parties, that’s where you get a lot of potential gamesmanship and a lot of potential abuse right of parties saying, obviously, I’m going to need 10 years worth of documents and depositions of an entire C suite in this straightforward employment case, for example. But for us, we take the position that certainly you can ask for right. But for an arbitrator has the power and the authority as they should, right, so be able to say, You know what? In this case, this happened last month, and so I don’t need 10 years worth of documents. So you don’t need 10 years worth of documents, but here’s what I need to really understand what’s going on in this case. So please share with the other side. I don’t think I need to hear from the entire C suite. I may want to hear what this person’s manager had to say. You get that deposition, you get that witness. And so it allows an arbitrator to really tailor a discovery proceeding, right? And so that’s one example from beyond procedures, flat fees, right? And so everything we created is a flat fee structure, and that’s that’s something that, as former GCS ourselves, we wanted that cost predictability. And so the cost predictability comes both with the flat fees and the set of procedures that will push parties to that resolution in 100 days. And so even the outside counsel fees will be a little more predictable. But being able to actually budget and being able to actually tell our CFOs and our CEOs back when we were GCS, exactly how long and how much a case was going to take would have been incredibly valuable. And of course, lastly, the tech right? So we built our technology from the ground up. Our engineering, product and design teams are it’s folks who’ve built sophisticated data science platforms, sophisticated e commerce platforms, healthcare analytics, genomic analytics platforms, insurance platforms, so people who’ve taken complex and distilled it down to accessible and understandable. And so these are the folks building our tech and designing the tech from the ground up. And when everything’s facilitated on a platform that’s easy to use and secure, I should add, we’re already sought to certified, and so the security element has been top of mind since day one. That, of course, just makes everything way easier and way more accessible. And of course, we default to virtual proceedings.
Have integrations built with video platforms to facilitate that seamlessly. But fortunately, at least nowadays, I hear of other folks doing a little more virtually. And so it’s really the everything else, the platform, the procedures, the fees. That really changed the game. How do you see the focus on advanced technology and experience neutrals affecting the way ADR is evolving? They go very much hand in hand. The tech actually makes the neutrals lives way easier. Everything’s in one place, even the permissioning the and then additional capabilities will build in that potentially help summarize documents and help them get through and process, you know, the case even faster. All of it is there in service of the neutrals, and, of course, the parties right. It’s also meant to help the parties and their attorneys get through, especially the logistics of a case far faster, and so I think the two would grow together. I don’t think there’s a point where they these are opposing forces, so to speak, even in a Gen AI world, as I said earlier, I think there’s very much a need for the human element in most disputes. This is Ari Kaplan speaking with rich Lee, co founder and CEO for New Era ADR, a technology company increasing predictability in the legal dispute process. Rich thanks so much. Thanks so much. Ari, thanks for having me. Thank you for listening to the reinventing professionals podcast. Visit reinventingprofessionals.com